---
title: "JDB Silent, Can Wanglaoji Continue to Succeed?"
description: "After the five-year herbal tea war ended in 2018, JDB lost and Wanglaoji won. JDB's sales dropped to 7 billion yuan with a net loss of 583 million yuan, while Wanglaoji's sales grew to 9.487 billion yuan in 2018. JDB's defeat was due to ignoring capital and betting on the gold can, and its chances of a comeback are slim. Without JDB's challenge, Wanglaoji's future success is uncertain."
author: "文石"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2019-05-28"
language: "en"
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---

# JDB Silent, Can Wanglaoji Continue to Succeed?

> After the five-year herbal tea war ended in 2018, JDB lost and Wanglaoji won. JDB's sales dropped to 7 billion yuan with a net loss of 583 million yuan, while Wanglaoji's sales grew to 9.487 billion yuan in 2018. JDB's defeat was due to ignoring capital and betting on the gold can, and its chances of a comeback are slim. Without JDB's challenge, Wanglaoji's future success is uncertain.

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After 2018, the five-year herbal tea war finally ended, with Wanglaoji and JDB having decided the winner and loser.
"This was a brutal battle, truly describable as 'rivers of blood.'" said Li Chunlin, who took office as JDB's president in March 2018.
JDB lost, a result that brought grief to JDB people. But the business world is like this: there is no right or wrong, only winning or losing.
**The herbal tea landscape after the smoke clears**
Let's look at the fate of each player after the herbal tea war ended.
**JDB, which tried to recreate the Wanglaoji miracle.**
Zhonghong Co., the related party through which JDB attempted to go public via backdoor listing, disclosed that in 2017, JDB's sales revenue was only 7.002 billion yuan, with a net loss of 583 million yuan, and it was insolvent. Sales of 7 billion yuan were less than half of what JDB had previously claimed.
A series of bad news followed: failed listing, declining performance, cash flow disruption, employee strikes, factory shutdowns, and executive resignations.
To this day, JDB is still undergoing painful restructuring, with online and offline promotions almost completely halted, and JDB products are hard to find in many markets.
**Now look at Wanglaoji after the war.**
According to listed company data, Wanglaoji Big Health's sales revenue in 2017 was 8.574 billion yuan, up 10.36% year-on-year; in 2018, sales were 9.487 billion yuan, up 10.66% year-on-year.
In May 2019, Wanglaoji announced that Zhang Yixing and Zhou Dongyu would be its celebrity spokespersons. Guangyao Wanglaoji has not only seen simultaneous growth in volume and profit for three consecutive years, but its herbal tea market share is around 70%, and it is riding high.
**The Heqizheng and others that should be remembered.**
Herbal tea brands were forced into three categories: Wanglaoji, JDB, and others represented by Heqizheng. In five years, Heqizheng and others had almost no chance to make their voices heard.
They couldn't compete in advertising, couldn't move prices, and even seeking attention was ignored. Without advertising, stories, hot topics, or even negative buzz, Heqizheng and others were quickly forgotten by the market and consumers.
In the future, searching for Heqizheng might return "Sorry, no matching products found."
If you search for Heqizheng's official website, you might be misdirected to a site selling brown sugar for women, with the slogan even changed to "Witness of Love."
For Heqizheng, a herbal tea brand that once had 2 billion in sales, how heartbroken must it be to so decisively shelve the herbal tea business?
But what makes Heqizheng laugh through tears is that in the 2018 China Brand Power Index for herbal tea brands released by Chnbrand, Wanglaoji ranked first, JDB second, and Heqizheng still ranked third.
Why did JDB lose? JDB itself has reflected and summarized multiple times. The reflections are profound, but the key to JDB's defeat lies in two failures.
**JDB's two defeats that lost a war**
JDB had an admirable marketing team, capable of fighting tough battles and launching surprise attacks. It was this team that built the former Wanglaoji.
Although they didn't bring JDB victory in the herbal tea war, this does not diminish the team's former glory.
**JDB's first defeat: Ignoring capital, relying on its own resources to fight a war of attrition.**
In June 2012, Guangyao Wanglaoji started fighting as soon as it launched. In just one year, JDB's wholesale price dropped from 72 yuan per case to over 40 yuan, nearly destroying the entire herbal tea price structure. At this point, JDB, with the highest market share, actually lost more.
Additionally, to quickly build consumer awareness, JDB continuously sponsored the popular variety show "The Voice of China." The first season's sponsorship fee was 60 million yuan, the second season 200 million yuan, and the third season had already reached 250 million yuan. And this was just a small part of JDB's lavish spending.
Besides price wars and advertising wars, there were also channel wars and legal battles. Which battle wasn't attritional? JDB clearly had no idea how much ammunition victory would require.
"Before 2012, (JDB) had never borrowed from banks, didn't know how to deal with financial institutions, and never used their money to do business," Li Chunlin once described to the media.
Just three years later, in 2015, JDB had to borrow money from banks. But being unfamiliar with and unprofessional in capital operations, and lacking sufficient credit, it inevitably faced bank loan recalls and supplier supply cuts and debt collection at critical moments.
In contrast, Wanglaoji, backed by a listed company, managed its financing prudently throughout the war and spent far less on advertising than JDB.
When the liquidity crisis broke out in 2018, JDB's resources were completely exhausted, and the entire production-supply-marketing system came to a halt overnight.
**JDB's second defeat: Abandoning the red can and betting on the gold can JDB.**
In May 2015, JDB launched the gold can herbal tea, which was the real turning point of the herbal tea war.
Before 2015, with a strong channel network and marketing execution, JDB almost completed the replacement of terminal products overnight; then, through advertising, it quickly made the new brand JDB a household name.
In the first two years of the herbal tea war, although Wanglaoji was growing, JDB still held a certain advantage.
Because the brand switch was very smooth, JDB's management predicted that the gold can product could also smoothly take over the red can market.
The market did not favor JDB again. The classic red can packaging in consumers' minds was much more stubborn than JDB imagined. Despite increasing advertising efforts, the gold can product sold slowly, which was the most fatal issue.
The moment JDB went all-in on the gold can, the defeat was sealed, even though it later gained "shared" rights to the red can packaging in 2018, it was to no avail.
**JDB's defeat was strategic, not due to the marketing team.** Although most JDB people have now scattered, Li Chunlin is leading the remnants of this team, rebuilding the team, and trying to save themselves.
But do Li Chunlin and JDB people still have a chance?
**Can JDB herbal tea make a comeback?**
In 2018, Wanglaoji and JDB gradually stopped the price war, and herbal tea prices began to recover. After the capital crisis, a shaken JDB clearly yearns for peace, and Wanglaoji currently shows no signs of restarting the war.
Under Li Chunlin's leadership, JDB no longer shouts "far ahead" nor treats Wanglaoji as an irreconcilable enemy in public relations. **He set a more pragmatic goal: "Persist in a second startup, integrate advantageous resources, and successfully list within three years."**
Large-scale department cuts and layoffs, sorting out suppliers, moving the headquarters from Beijing Yizhuang to Tianjin—JDB's series of actions drew much criticism, but with few explanations.
Everything is to save money, everything is to survive, even if it means bearing humiliation.
From actual actions, JDB is not doing nothing. In terms of products, JDB still focuses on the gold can, launching a newly developed gold can product and expecting it to become JDB's main profit source.
Even in May 2019, JDB invested 60 million yuan to establish a logistics company to save logistics costs. This 60 million yuan is a large sum for the current JDB.
I don't know Li Chunlin's true thoughts, but for JDB herbal tea to make a comeback, it must at least face the following two issues.
**1. Should JDB and Wanglaoji be the same or different?**
Should JDB continue to promote "the same formula, the same taste" as Wanglaoji? Should it relaunch a red can product highly similar to Wanglaoji?
If the answer is no, and consumers have voted against the previous gold can product, what reason would consumers have to buy and continue consuming JDB? In the spending war, JDB always tried to take away the "fear of getting heaty" positioning, but it proved impossible. So what is the connotation of JDB's herbal tea as it starts anew?
If it chooses to closely imitate and follow, launching a red can JDB, what will happen to the heavily invested gold can? If both gold and red cans are done simultaneously, any explanation will confuse consumers.
This is a crucial choice. The previous choice didn't succeed. Can it get the right answer this time?
**2. Will Wanglaoji pursue relentlessly?**
JDB's marketing team made huge historical contributions to the Wanglaoji brand. Facing JDB, which has just caught its breath from chaos, will Wanglaoji pursue relentlessly or let it go?
JDB believes it "must plan to exit the price war." The problem is that a price war isn't something you can start or stop at will.
What is Wanglaoji's basis for deciding whether to fight or make peace as it returns to herbal tea dominance? How much influence will the new JDB team's strategies and choices have on this?
If JDB launches the red can, there is no doubt that this is vital to Wanglaoji, and it will inevitably strike. If it focuses on the gold can and doesn't do the red can, perhaps a major war won't break out. But without strong advertising support, how can the gold can survive?
Li Chunlin once encouraged the team, saying, "We have experienced all kinds of storms, but don't give up until the last moment. We will go all out."
Encouragement helps, but morale is high at first, then wanes, and is exhausted at the third attempt. After five years of herbal tea hegemony, JDB has consumed almost all its capital and talent, severely depleted. The possibility of a comeback in the herbal tea field is very small.
I have no doubt that **Li Chunlin can lead the JDB team to great success in the future, but that success is highly unlikely to come from the herbal tea field.**
If JDB truly goes silent, can Wanglaoji continue to succeed?
Looking around the world, almost every huge market has a pair of excellent twin stars. For example, Coca-Cola and Pepsi, Uni-President and Master Kong, Mengniu and Yili, Mercedes-Benz and BMW, McDonald's and KFC...
**It's hard to determine whether the huge market cultivated such twin stars, or whether the excellent twin stars created the huge and prosperous market.**
A person can't break a world record alone, and a company can't achieve a great industry alone. Without Pepsi's persistent and relentless pursuit, it's hard to imagine Coca-Cola creating over a century of brilliance.
Roger Enrico, former Pepsi executive, said: "I believe Coca-Cola people would say that no one contributed more to Coca-Cola's success today than Pepsi."
We once imagined that Wanglaoji and JDB could become twin stars like the two colas, competing with each other, learning from each other, respecting rules, and jointly expanding the herbal tea market, a national beverage.
Currently, after five years of a life-and-death war, JDB no longer has the ability to challenge Wanglaoji.
Will the disappearance of a once-hated rival be a blessing for the victor? Without JDB's challenge, can Wanglaoji continue to succeed? It's hard.
Nokia had no rivals in the feature phone era, but was killed by Apple's cross-industry entry.
Kodak, because it had no rivals, invented digital photography technology but shelved it, and was killed by digital camera manufacturers.
Google was forced out of the Chinese mainland market, and as a result, Baidu, once a young talent, has degenerated into today's disgraceful state.
Any industry leader is the establisher of industry order. Its pattern and future are the industry's pattern and future. Moutai didn't stoop to compete with smaller players, which made itself successful and also made Wuliangye and the trillion-yuan baijiu industry successful.
It is precisely because of Mengniu's continuous growth and pursuit that Yili ran faster and faster, crossing into the hundred-billion club.
Herbal tea was originally a niche beverage in a corner, and it has only been nationwide for a little over a decade, with shallow roots. Since 2015, the growth rate of the herbal tea industry has slowed to single digits.
Herbal tea no longer has the voice of Heqizheng. If JDB is also gone, will herbal tea return to a niche world? Can Wanglaoji single-handedly support the future of herbal tea? There have been no such successful cases in the past, and there probably won't be in the future.
Many twin stars in various categories may be born as rivals, even mortal enemies, but from another perspective, they are probably the most understanding confidants and best friends.
Having such an excellent rival is a brand's good fortune.


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